CERTIFICATE OF DESIGNATION
                                of
                     SERIES A PREFERRED STOCK
                                of
                     VANGUARD AIRLINES, INC.

         _______________________________________________
                 (Pursuant to Section 151 of the
                Delaware General Corporation Law)
         ________________________________________________

          Vanguard Airlines, Inc., a Corporation organized and
existing under the General Corporation Law of the State of
Delaware (hereinafter called the "Company"), hereby certifies
that the following resolution was adopted by the Board of
Directors of the Company as required by Section 151 of the
General Corporation Law by Unanimous Written Consent duly
executed on January 23, 1998:

          RESOLVED, that pursuant to the authority granted to and
vested in the Board of Directors of this Company (hereinafter
called the "Board of Directors" or the "Board") in accordance
with the provisions of the Restated Certificate of Incorporation,
as amended, of the Company (the "Restated Certificate"), the
Board of Directors hereby creates a series of Preferred Stock,
par value $0.001 per share (the "Preferred Stock"), of the
Company and hereby states the designation and number of shares,
and fixes the relative rights, preferences, and limitations
thereof as follows:

     Section 1.  Designation and Amount.  The shares of this
series shall be designated as "Series A Preferred Stock" (the
"Series A Preferred") and the number of shares constituting the
Series A Preferred shall be 450,000.  Such number of shares may
be increased or decreased by resolution of the Board of
Directors; provided, that no decrease shall reduce the number of
shares of Series A Preferred to a number less than the number of
shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities
issued by the Company convertible into Series A Preferred.

     Section 2.  Dividend Provisions.  Subject to the rights of
additional series of Preferred Stock that may be designated by
the Board from time to time, the holder of each share of Series A
Preferred shall be entitled to receive, out of funds legally
available for the purpose, dividends at an annual rate of $0.80
per share, as adjusted to reflect stock dividends (except stock
dividends paid with respect to Series A Preferred), stock splits,



<PAGE>




combinations, recapitalizations or the like after the date upon
which shares of Series A Preferred were first issued (the
"Initial Series A Issue Date"), payable when, as, and if declared
by the Board of Directors.  Such dividends shall not be
cumulative.  The holder of each share of Series A Preferred shall
be entitled to receive the dividend prior and in preference to
any declaration and payment of any dividend (payable other than
in stock of this Company) on the Common Stock.

     Section 3.  Liquidation Preferences.

     (a)  In the event of any liquidation, dissolution or winding
up of this Company, either voluntary or involuntary, and subject
to the rights of series of Preferred Stock which may from time to
time come into existence, the holders of shares of Series A
Preferred shall be entitled to receive, prior and in preference
to any distribution of any of the assets of this Company to the
holders of Common Stock by reason of their ownership thereof, an
amount per share equal to the sum of (i) $10.00 for each
outstanding share of Series A Preferred (the "Original Series A
Issue Price") and (ii) an amount equal to declared but unpaid
dividends on such share, such amounts being adjusted to reflect
stock dividends (except stock dividends paid with respect to
Series A Preferred), stock splits, combinations,
recapitalizations or the like after the Initial Series A Issue
Date.  If, upon the occurrence of such event, the assets and
funds thus distributed among the holders of the Series A
Preferred shall be insufficient to permit the payment to such
holders of the full aforesaid preferential amounts, then, subject
to the rights of series of Preferred Stock which may from time to
time come into existence, the entire assets and funds of the
Company legally available for distribution to the holders of the
Series A Preferred shall be distributed ratably among the holders
of shares of Series A Preferred in proportion to the preferential
amount each such holder is otherwise entitled to receive.

     (b)  Upon the completion of the distribution required by
subsection (a) above and any other distribution which may be
required with respect to other series of Preferred Stock which
may from time to time come into existence, the remaining assets
of the Company available for distribution to holders shall be
distributed (i) if such distribution shall occur prior to July
15, 1998, among the holders of Series A Preferred and Common
Stock pro rata based on the number of shares of Common Stock held
by each (assuming full conversion of all such Series A Preferred)
and (ii) if such distribution shall occur after July 15, 1998,
among the holders of Common Stock pro rata based on the number of
shares of Common Stock held by each.

     (c)  (i)  For purposes of this Section 3, a liquidation,
dissolution or winding up of this Company shall be deemed to be
occasioned by, or to include, (A) the acquisition of the Company
by another entity by means of any transaction or series of
related transactions (including, without limitation, any
reorganization, merger or consolidation that results in the
transfer of fifty percent (50%) or more of the outstanding voting
power of the Company); or (B) a sale of all or substantially all
of the assets of the Company.



<PAGE>



          (ii) In any of such events, if the consideration
received by the Company or its stockholders is other than cash,
its value will be deemed its fair market value.  Any securities
shall be valued as follows:

               A.   Securities not subject to investment letter
or other similar restrictions on free marketability covered
by (B) below:

                    (1)  If traded on a securities exchange or
through the Nasdaq National Market, the value shall be deemed to
be the average of the closing prices of the securities on such
exchange over the thirty (30) day period ending three (3) days
prior to the closing;

                    (2)  If actively traded over-the-counter, the
value shall be deemed to be the average of the closing bid or
sale prices (whichever is applicable) over the thirty (30) day
period ending three (3) days prior to the closing; and

                    (3)  If there is no active public market, the
value shall be the fair market value thereof, as mutually
determined by the Company and the holders of at least a majority
of the voting power of all then outstanding shares of Preferred
Stock.

               (B)  The method of valuation of securities subject
to investment letter or other restrictions on free marketability
(other than restrictions arising solely by virtue of a
stockholder's status as an affiliate or former affiliate) shall
be to make an appropriate discount from the market value
determined as above in (A)(1), (2) or (3) to reflect the
approximate fair market value thereof, as mutually determined by
the Company and the holders of at least a majority of the voting
power of all then outstanding shares of such Preferred Stock.

          (iii)  In the event the requirements of this
subsection 3(c) are not complied with, this Company, shall
forthwith either:

               (A)  cause such closing to be postponed until such
time as the requirements of this Section 3 have been complied
with; or

               (B)  cancel such transaction, in which event the
rights, preferences and privileges of the holders of the Series A
Preferred shall revert to and be the same as such rights,
preferences and privileges existing immediately prior to the date
of the first notice referred to in subsection 3(c)(iv) hereof.

          (iv) The Company shall give each holder of record of
Series A Preferred written notice of such impending transaction
not later than twenty (20) days prior to the stockholders'
meeting called to approve such transaction, or twenty (20) days
prior to the closing of such transaction, whichever is earlier,
and shall also notify such holders in writing of the final
approval of such transaction.  The first of such notices shall
describe the material terms and conditions of the impending
transaction and the <PAGE> provisions of this Section 3, and the Company
shall thereafter give such holders prompt notice of any material
changes.  The transaction shall in no event take place sooner
than twenty (20) days after the Company has given the first
notice provided for herein or sooner than ten (10) days after the
Company has given notice of any material changes provided for
herein; provided, however, that such periods may be shortened
upon the written consent of the holders of Series A Preferred
that are entitled to such notice rights or similar notice rights
and that represent at least a majority of the voting power of all
then outstanding shares of such Series A Preferred.

     Section 4.  Redemption.  The Series A Preferred is not
redeemable.

     Section 5.  Conversion.  The holders of Series A Preferred
shall have conversion rights as follows (the "Conversion
Rights"):

     (a)  Right to Convert.

          (i)  Each share of Series A Preferred shall be
convertible at the option of the holder thereof, at any time
after July 15, 1998, at the office of this Company or any
transfer agent for the Series A Preferred, into the number  of
fully paid and non-assessable shares of Common Stock as is
determined by dividing $10.00 by the Conversion Price, determined
as hereinafter provided, in effect at the time of conversion. The
initial Conversion Price (the "Conversion Price") shall be $0.50.
Such initial Conversion Price shall be subject to adjustment as
hereinafter provided. The number of shares of Common Stock into
which a share of Series A Preferred is convertible is hereinafter
referred to as the "Conversion Rate".

     (b)  Mechanics of Conversion.   Before any holder of Series
A Preferred shall be entitled to convert the same into shares of
Common Stock, such holder shall surrender the certificate or
certificates therefor, duly endorsed, at the office of this
Company or of any transfer agent for the Series A Preferred, and
shall give written notice to this Company at such office that he
elects to convert the same, and shall state therein the name or
names which he wishes the certificate or certificates for shares
of Common Stock to be issued. This Company shall, as soon as
practicable thereafter, issue and deliver at such office to each
holder of Series A Preferred, or to his nominee or nominees, a
certificate or certificates for the number of shares of Common
Stock to which he shall be entitled. Such conversion shall be
deemed to have been made immediately prior to the close of
business on the date of such surrender of the shares of Series A
Preferred to be converted, and the person or persons entitled to
receive the shares of Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders
of such shares of Common Stock on such date.

     (c)  Fractional Shares.  No fractional shares shall be
issued upon conversion of the Series A Preferred.  In lieu of the
Company issuing any fractional shares to holders upon the
conversion of the Series A Preferred, the Company shall pay to
such holders an amount equal to the product obtained by
multiplying the Conversion Price by the fraction of a share not
issued pursuant to the previous sentence.



<PAGE>



     (d)  Adjustment for Dilutive Issuances.

          (i)  (A)  If this Company shall issue, after the
Initial Series A Issue Date to and including March 18, 2001, any
Additional Stock (as defined below) without consideration or for
a consideration per share less than the Conversion Price for such
series in effect immediately prior to the issuance of such
Additional Stock, the Conversion Price for such series in effect
immediately prior to each such issuance shall forthwith (except
as otherwise provided in this clause (i)) be adjusted to a price
equal to the price paid per share for such Additional Stock;
provided, however that the Conversion Price shall not be adjusted
to a price below $0.10 (as adjusted for stock dividends, stock
splits, combinations, recapitalizations or like changes in the
Company's capital structure).

               (B)  Except to the limited extent provided for in
subsections (E)(3) and (E)(4), no adjustment of such Conversion
Price pursuant to this subsection 5(d)(i) shall have the effect
of increasing the Conversion Price above the Conversion Price in
effect immediately prior to such adjustment.

               (C)  In the case of the issuance of Common Stock
for cash, the consideration shall be deemed to be the amount of
cash paid therefor before deducting any reasonable discounts,
commissions or other expenses allowed, paid or incurred by this
Company for any underwriting or otherwise in connection with the
issuance and sale thereof.

               (D)  In the case of the issuance of the Common
Stock for a consideration in whole or in part other than cash,
the consideration other than cash shall be deemed to be the fair
value thereof as determined by the Board of Directors
irrespective of any accounting treatment.

               (E)  In the case of the issuance (whether before,
on or after the applicable purchase date) of options to purchase
or rights to subscribe for Common Stock, securities by their
terms convertible into or exchangeable for Common Stock or
options to purchase or rights to subscribe for such convertible
or exchangeable securities, the following provisions shall apply
for all purposes of this subsection 5(d)(i) and subsection
5(d)(ii):

                    (1)  The shares of Common Stock deliverable
upon exercise (to the extent then exercisable) of such options to
purchase or rights to subscribe for Common Stock shall be deemed
to have been issued at the time such options or rights were
issued and for a consideration equal to the consideration
(determined in the manner provided in subsections 5(d)(i)(C) and
(d)(i)(D)), if any, received by this Company upon the issuance of
such options or rights plus the minimum exercise price provided
in such options or rights for the Common Stock covered thereby.

                    (2)  The shares of Common Stock deliverable
upon conversion of, or in exchange (to the extent then
convertible or exchangeable) for, any such convertible or
exchangeable securities or upon the exercise of options to




<PAGE>



purchase or rights to subscribe for such convertible or
exchangeable securities and subsequent conversion or exchange
thereof shall be deemed to have been issued at the time such
securities were issued or such options or rights were issued and
for a consideration equal to the consideration, if any, received
by this Company for any such securities and related options or
rights (excluding any cash received on account of accrued
interest or accrued dividends), plus the minimum additional
consideration, if any, to be received by this Company upon the
conversion or exchange of such securities or the exercise of any
related options or rights (the consideration in each case to be
determined in the manner provided in subsections 5(d)(i)(C) and
(d)(i)(D)).

                    (3)  In the event of any change in the
consideration payable to this Company upon exercise of such
options or rights or upon conversion of or in exchange for such
convertible or exchangeable securities, including, but not
limited to, a change resulting from the antidilution provisions
thereof, the Conversion Price of the Series A Preferred, to the
extent in any way affected by such options, rights or securities,
shall be recomputed to reflect such change, but no further
adjustment shall be made for the actual issuance of Common Stock
or any payment of such consideration upon the exercise of any
such options or rights or the conversion or exchange of such
securities.

                    (4)  Upon the expiration of any such options
or rights, the termination of any such rights to convert or
exchange or the expiration of any options or rights related to
such convertible or exchangeable securities, the Conversion Price
of the Series A Preferred, to the extent in any way affected by
such options, rights or securities or options or rights related
to such securities, shall be recomputed to reflect the issuance
of only those shares of Common Stock (and convertible or
exchangeable securities that remain in effect) actually issued
upon the exercise of such options or rights, upon the conversion
or exchange of such securities or upon the exercise of the
options or rights related to such securities.

                    (5)  The shares of Common Stock deemed issued
and the consideration deemed paid therefor pursuant to
subsections 5(d)(i)(E)(1) and (2) shall be appropriately adjusted
to reflect any change, termination or expiration of the type
described in either subsection 5(d)(i)(E)(3) or (4).

          (ii) "Additional Stock" shall mean any shares of Common
Stock issued (or deemed to have been issued pursuant to
subsection 5(d)(i)(E)) by this Company after the Initial Series A
Issue Date other than:

               (A)  Common Stock issued pursuant to a transaction
described in subsection 5(e) hereof; or

               (B)  Shares of Common Stock issuable or issued to
employees, consultants, directors or vendors (if in transactions
with primarily non-financing purposes) of this Company directly
or pursuant to a stock option plan, <PAGE> employee stock purchase plan
or other plan or agreement approved by the Board of Directors of
this Company.

     (e)  Stock Splits and Dividends.  In the event this Company
should at any time or from time to time after the Initial
Series A Issue Date fix a record date for the effectuation of a
split or subdivision of the outstanding shares of Common Stock or
the determination of holders of Common Stock entitled to receive
a dividend or other distribution payable in additional shares of
Common Stock or other securities or rights convertible into, or
entitling the holder thereof to receive directly or indirectly,
additional shares of Common Stock (hereinafter referred to as
"Common Stock Equivalents") without payment of any consideration
by such holder for the additional shares of Common Stock or the
Common Stock Equivalents (including the additional shares of
Common Stock issuable upon conversion or exercise thereof), then,
as of such record date (or the date of such dividend
distribution, split or subdivision if no record date is fixed),
the Conversion Price of the Series A Preferred shall be
appropriately decreased so that the number of shares of Common
Stock issuable on conversion of each share of such series shall
be increased in proportion to such increase of the aggregate of
shares of Common Stock outstanding and those issuable with
respect to such Common Stock Equivalents with the number of
shares issuable with respect to Common Stock Equivalents
determined from time to time in the manner provided for deemed
issuances in subsection 5(d)(i)(E).

     (f)  Combinations.  If the number of shares of Common Stock
outstanding at any time after the Initial Series A Issue Date is
decreased by a combination of the outstanding shares of Common
Stock, then, following the record date of such combination, the
Conversion Price for the Series A Preferred shall be
appropriately increased so that the number of shares of Common
Stock issuable on conversion of each share of Series A Preferred
shall be decreased in proportion to such decrease in outstanding
shares.

     (g)  Other Distributions.  In the event this Company shall
declare a distribution payable in securities of other persons,
evidences of indebtedness issued by this Company or other
persons, assets (excluding cash dividends) or options or rights
not referred to in subsection 5(e), then, in each such case for
the purpose of this subsection 5(g), the holders of the Series A
Preferred shall be entitled to a proportionate share of any such
distribution as though they were the holders of the number of
shares of Common Stock of this Company into which their shares of
Series A Preferred are convertible as of the record date fixed
for the determination of the holders of Common Stock of this
Company entitled to receive such distribution.

     (h)  Recapitalizations.  If at any time or from time to time
there shall be a recapitalization of the Common Stock (other than
a subdivision, combination or merger or sale of assets
transaction provided for elsewhere in this Section 5 or
Section 3) provision shall be made so that the holders of the
Series A Preferred shall thereafter be entitled to receive upon
conversion of the Series A Preferred the number of shares of


<PAGE>



stock or other securities or property of the Company or
otherwise, to which a holder of Common Stock deliverable upon
conversion would have been entitled on such recapitalization.  In
any such case, appropriate adjustment shall be made in the
application of the provisions of this Section 5 with respect to
the rights of the holders of the Series A Preferred after the
recapitalization to the end that the provisions of this Section 5
(including adjustment of the Conversion Price then in effect and
the number of shares purchasable upon conversion of the Series A
Preferred) shall be applicable after that event as nearly
equivalent as may be practicable.

     (i)  No Impairment.  This Company will not, by amendment of
its Restated Certificate or through any reorganization, transfer
of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms to be observed
or performed hereunder by this Company, but it will at all times
in good faith assist in the carrying out of all of the provisions
of this Section 5 and in the taking of all such action as may be
necessary or appropriate in order to protect the Conversion
Rights of the holders of the Series A Preferred against
impairment.

     (j)  Certificate as to Adjustments.       Upon the
occurrence of each adjustment or readjustment of the Conversion
Price of the Series A Preferred pursuant to this Section 5, this
Company, at its expense, shall promptly compute such adjustment
or readjustment in accordance with the terms hereof and prepare
and furnish to each holder of such Series A Preferred a
certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or
readjustment is based.  This Company shall, upon the written
request at any time of any holder of Series A Preferred, furnish
or cause to be furnished to such holder a like certificate
setting forth (A) such adjustment and readjustment, (B) the
Conversion Price at the time in effect, and (C) the number of
shares of Common Stock and the amount, if any, of other property
which at the time would be received upon the conversion of a
share of Series A Preferred.

     (k)  Notices of Record Date.  In the event of any taking by
this Company of the record of the holders of any class of
securities for the purpose of determining the holders thereof who
are entitled to receive any dividend (other than a cash dividend)
or other distribution, this Company shall mail to each holder of
Series A Preferred, at least twenty (20) days prior to the date
specified herein, a notice specifying the date on which any such
record is to be taken for the purpose of such dividend or
distribution.

     (l)  Reservation of Stock.  This Company shall at all times
reserve and keep available out of its authorized but unissued
shares of Common Stock solely for the purpose of effecting the
conversion of the shares of the Series A Preferred such number of
its shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding shares of
Series A Preferred; and if at any time the number of authorized
but unissued shares of Common Stock shall not be sufficient to
effect the conversion of all the then outstanding shares of the
Series A Preferred, this Company will <PAGE> take such corporate action
as may be necessary, in the opinion of its counsel, to increase
its authorized but unissued shares of Common Stock to such number
of shares as shall be sufficient for such purpose.

     (m)  Notices. Any notice required by the provisions of this
Section 5 to be given to the holders of shares of Series A
Preferred shall be deemed given if deposited in the United States
mail, postage prepaid, and addressed to each holder of record at
his or her address appearing on the books of this Company.

     Section 6.  Voting Rights.

     (a)  The holder of each share of Series A Preferred shall
have the right to one vote for each share of Common Stock into
which such Series A Preferred could then be converted, and with
respect to such vote, such holder shall have full voting rights
and powers equal to the voting rights and powers of the holders
of Common Stock, and shall be entitled, notwithstanding any
provision hereof, to notice of any stockholders' meeting in
accordance with the bylaws of this Company, and shall be entitled
to vote, together with holders of Common Stock, with respect to
any question upon which holders of Common Stock have the right to
vote.  Fractional votes shall not, however, be permitted and any
fractional voting rights available on an as-converted basis
(after aggregating all shares into which shares of Series A
Preferred held by each holder could be converted) shall be
rounded to the nearest whole number (with one-half being rounded
upward).

     (b)  So long as shares of the Series A Preferred Stock are
outstanding, this Company shall not, without first obtaining the
approval (by vote or written consent, as provided by law) of at
least fifty percent (50%) of the then outstanding shares of the
Series A Preferred Stock, voting together as a single class on an
as-converted basis, (i) alter or change the rights, preferences,
or privileges of the Series A Preferred Stock so as to affect
adversely such series of Preferred Stock or (ii) increase the
authorized number of shares of Series A Preferred Stock.





<PAGE>



     IN WITNESS WHEREOF, this Certificate of Designation is
executed on behalf of the Company this 18th day of March, 1998.

                              VANGUARD AIRLINES, INC.



                              By:

                              Title:    Chief Executive Officer &
                                        President